possible conflicts between aims

Cards (1)

  • POSSIBLE CONFLICTS BETWEEN MACROECONOMICS AIMS
    Full employment v/s stable price:
    If a government aims for full employment, the level of demand will be high, possibly higher than the level of supply. If this is the case, the excess demand in the economy will pull up prices, causing demand-pull inflation. It will therefore be difficult for a government to achieve a situation of stable price.